Back to top

Analyst Blog

We maintain our Neutral recommendation on casual-dining restaurant chain Buffalo Wild Wings Inc. (BWLD - Analyst Report). While the company’s strong brand name and expansion strategy bode well for future growth, a limited international presence and increasing operating expenses remain reasons for concern.

Reason behind the Reiteration

Minneapolis, Minn.-based Buffalo Wild Wings is famous for its bar concept. Amid uncertain economic conditions, the company has been posting positive comparable store sales (comps) for the past eight quarters. Gaining from top-line growth, easing wing costs in the upcoming quarters and proper labor management, the company expects to achieve a net earnings growth of 25% in 2013, higher than the prior-year growth of 17%.

Buffalo Wild Wings remains better-positioned than many of its peers because of menu innovation, better food presentation and operational efficiency. The company’s ‘guest experience business model’ and new unit design layout will invigorate its potential as a brand and help augment its customer base, going forward.

In addition, the company’s three-year collaboration with National Collegiate Athletic Association (NCAA) will help it to increase its visibility as a brand and attract customers through digital and social media. Moreover, the company’s recent acquisition of the fast-casual pizza restaurant, PizzaRev will likely help broaden Buffalo Wild Wings’ reach in the U.S. quick-service-restaurant industry. 

The Zacks Rank #3 (Hold) company is continuously trying to expand its footprint worldwide. Buffalo Wild Wings, which owns, operates, and franchises 891 casual dining restaurants worldwide, though most of them are in the U.S. It has plans to achieve the 1,000-unit milestone by the end of 2013. The company also intends to open 1,500 units over the next five to seven years.

Despite its strong domestic presence, the company seems to be slow on the international front. We believe that it needs to expand beyond the U.S. in order to offset the cut-throat competition in the saturated domestic market.

Moreover, the company’s sales driven initiatives will increase its operating costs in 2013. Apart from this, we believe, the implementation of the Affordable Care Act will drive the company’s overall costs further up, hurting its margins, going ahead. For the time being, these factors keep us on the sidelines.

Other Stocks to Consider

Some other restaurateurs worth considering are CEC Entertainment Inc. , AFC Enterprises Inc. and BJ's Restaurants, Inc. (BJRI - Analyst Report). While CEC Entertainment carries a Zacks Rank #1 (Strong Buy), AFC Enterprises and BJ’s Restaurants carry a Zacks Rank #2 (Buy).

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
UNITED THER… UTHR 117.83 +28.51%
TRIQUINT SE… TQNT 20.67 +6.52%
RF MICRO DE… RFMD 12.47 +6.04%
VASCO DATA… VDSI 14.77 +4.68%
BANCO DO BR… BDORY 15.53 +3.95%